Sin Taxes Are Back In Alabama Business

Gulf Shores News Staff • September 30, 2025

October 1st starts a new vape tax in Alabama

Vape Tax Law In Alabama

When cigarette taxes rose in Alabama many switched to vaping products. Some vape shops evolved over the years a began using different formulas for their "vape juice" that were dubious. All of this raised eyebrows in the Alabama Legislator and eventually led to new vape laws being passed as well as a new tax to pay for the enforcement.


Starting October 1, the State of Alabama will introduced a state excise tax of $0.10 per milliliter on all vapor products. Some cities, including those on the local coast, will also impose their own local taxes on top of the state tax.


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The taxes on alcohol, cigarettes and vapes are often called a "sin tax" and were meant to dissuade citizens from using those products. However, they often lead to users finding a way to get the product cheaper in nearby states or purchase them from illegal markets.


When you consider the alcohol tax on distilled spirits versus those in Florida, Alabama's tax is almost 4 times higher. Local residents often make a monthly trip to the line to stock their bars and maybe pickup some lottery tickets (but that is an issue for another article).


But it could be worse. Vape user could live in Minnesota where the four cartridges of 1.8mL of fluid is the highest in the nation (as of Jan. 2025) at $17.90

So this week begins a new chapter in the vape business and some distribution locations have already closed their doors in anticipation. The new tax in the State of Alabama will be distributed in the following manner:

 

  • 50% to the State General Fund.
  • 25% to counties based on population.
  • 25% to municipalities based on population. 


The municipal taxes will be managed by each city independently.


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